Netherlands: Latest working life developments – Q4 2017

Employer organisations’ plans for improving working conditions and wages for disabled workers, criticism of the system calculating the pension age, and career advice for older workers are the main topics of interest in this article. This country update reports on the latest developments in working life in the Netherlands in the fourth quarter of 2017.

Positive outlook for employer organisations

In December 2017, the General Employers’ Association (AWVN) reported that in 20173.5 million employees received a new collective labour agreement in the Netherlands. This is equivalent to 70% of all employees covered by collective agreements; currently, 80% of all Dutch employees are covered by a collective agreement. Collective bargaining ran smoothly despite an increase in industrial action. During the year, a total of 330 agreements were concluded, including 25 in November 2017 (which covered a total of 430,000 workers). The average agreed wage increase in 2017 was 1.71%. Wages continued to rise during the year as a result of positive economic trends.

A joint press release by association AWVN, the Dutch organisation for small and medium-sized enterprises (MKB-Nederland), and the Confederation of Netherlands Industry and Employers (VNO-NCW) stressed the importance of workers’ support for successful collective bargaining and improvement of working conditions, (including workers who are not trade union members). The statement was made at the presentation of the organisations’ joint guidance memorandum to employer negotiators in collective bargaining for 2018.

This broad support is seen by employers as crucial to keep collective labour agreements relevant and in order to be able to introduce concrete measures in the workplace, promoting sustainable employability. Employers also stressed the important role played by trade unions in the process, and how improving mutual trust was a priority for employer organisations in 2018.

The organisations indicated three main priorities:

the promotion of a longer working life through individualised budgets for worker development and the better use of methods to enable partial retirement

more internal flexibility in companies, in order to compete successfully in an increasingly digitalised and competitive world – many collective agreements hamper this, while flexibility could offer employers and workers more work opportunities and security

wage development should be tailored at the level of the sector or the company – basing standard wage increases more on the added value of the worker rather than age and seniority

Proposals to help workers with disabilities

In December 2017, the State Secretary for Social Affairs and Employment, Tamara van Ark, called on unions, employers, municipalities and client councils to help design a regulation to supplement the wages of people with disabilities. The proposal stressed the importance of providing an incentive for them to work longer by supplementing their wages at a level higher than they would receive if they were not working and were receiving benefits. In order to accommodate employers, the regulation is expected to be easy to implement – which increases the likelihood of it being adopted.

Criticism of pension age increase system

In October 2017, a report by the Netherlands Bureau for Economic Policy Analysis (CPB) criticised the system used for calculating the statutory pension age (PDF). The study warned that there might be serious repercussions for low-paid and self-employed workers if the system were not amended. A review of the pension benefit system is planned by the government in 2018 and it is also high on the agenda of the tripartite Social and Economic Council (SER).

Careers advice scheme for workers aged over 45

In December 2017, the Minister for Social Affairs and Employment, Wouter Koolmees, introduced a careers advice scheme aimed at workers over the age of 45 years in sectors such as catering, sales and secretarial work. The initiative is aimed at helping these workers prepare for future career challenges and acquiring or updating their skills. The measure is part of the ‘Perspective for 50-plus action plan’, and has a budget of €20 million.

Commentary

The Dutch economy is doing well; the GDP for 2017 is expected to show a rise of 3.2% on the previous year, while unemployment fell to 4.9 % (according to CPB national data), back to 2009 levels. In this generally positive context, measures are being taken to further increase labour market participation and to promote longer working lives.

The government intends to develop innovative labour market policies and pension reforms. It would be helpful if this could be done with the support of the social partners, although this seems to have become more difficult, with trade unions being more critical and aiming at strengthening and improving workers’ rights.